Tag: technology

Technology has changed banking and its associated activities forever. Moreover, this change is a continuous process. Despite being one of the oldest forms of business in the world, the advent of technology has changed how this form of business works.
For example, the first bank was opened in Italy in 1472 and it operates till date. That means that the bank must have had invested millions of dollars to keep up with the speed of changing technology and remain relevant in the life of its customers.

Effects of Technology on Business

There is one thing that is common among all forms of businesses – everything that speeds up the production or attracts more customers is always welcomed. A majority of such things is a result of technology. That is the reason why businesses tend to change their infrastructure time and again and adapt to the changing technology.
A number of businesses, in fact, a majority of them are now conducted on computers or smartphone. Technology has offered people millions of software, databases, personal schedules and stuff to make things easy for them while conducting their business.

The Way We Do Banking Now

Banks and its branches still remain integral to the customers, just like before. However, the way banking conduct business now has changed for sure, majorly because of the changes in technology.
Earlier, banks were not open at all days of the week. The cash counters used to close almost two hours after the lunch and people could only get information about their bank account and the balance cash by visiting the bank branch and filling a small strip of paper before handing it over to the cashier.
But the situation is a lot different today. People can have a 24X7 access to their money stored at the bank and they do not need to visit the bank anymore. While some may still like to visit the bank, but millions of people today now prefer to download the mobile phone app to make payments, check balance and apply for a credit card or a debit card purchase.
Moreover, a majority of banking-related queries are now cleared up over Facebook, email, phone, Skype or Twitter. That is, people do not have to queue up at the bank like their fathers and grandfathers to book an appointment with the manager or to talk to the cashier.

4 Ways Technology Has Changed Banking

While technology might have changed the way we conduct business in the banking world in a million ways, there are a few major identifiable aspects that have indeed made a big impact in the banking world. Some of these aspects are discussed below:

(1) Banking On-the-Go

Ever heard of banking without banks? Well, this has actually become true with the advent in technology. Now, a person hardly has to visit a bank. Just open an account and the rest of the things are taken care of online, even when the person is travelling. Moreover, banks are willing to provide door-to-door service for practically every service that they provide. For example, people can request for a new cheque book or file a credit card request and all the banking material would eventually arrive at their doorstep.

(2) One Tap Payment

Just about a decade ago, people literally had to walk up to telephone exchange and powerhouses, stand in queue and wait for their turn before they could pay the bill. Now, everything can be done through a single tap on their phone. People no longer need to stand in a queue to make payments. Technological innovations like Google Wallet allows users to store their personal banking information such as debit card details and credit card number on their phones, that too safely. This contactless technology has invaded the banks too.

(3) Reduced Customer Service

The introduction of mobile banking and online banking means that banks no longer need to provide an extensive face-to-face service for features that are majorly being used by the customers through their smartphones and computers. The elimination of generic customer service has paved way for a more specialized personal service that is tailored according to the needs of the individual customers. This is particularly important as a customer phones the bank for some query or personally visits the branch.

(4) Biometrics

People no longer need to remember their passwords for authentication. They can simply take advantage of the relatively new form of authentication that uses biometrics. Banks all over the world have started to welcome the use of biometrics for authentication. Techniques such as fingerprint and palm identification and facial and voice recognition have become relatively common now. Moreover, these are considered to be relatively safe forms of customer authentication.
Adapting to the changing technology has, in fact, become one of the most important transitions for banks around the world. In the wake of getting a competitive advantage over its rival, banks have now become relatively open to new technologies and new innovative ways through which banking is now conducted. NeoGrowth Credit Pvt. Ltd. which gives businesses funds or working capital is one institution that has matched its steps with the technological up-gradations.

It would be an understatement to say that it is yet to be seen how the banking would evolve in the future or whether the adaptation would be enough to keep up with the changing needs of the customer.

I believe in todays time the Indian Banking industry is in the middle of a digital revolution & 2016 is undoubtedly a year of digital transformation for financial sector,

I do not recall when last time I visited my bank for so called banking transactions . Today’s customer is interacting with the world through many digital platforms like social media, websites, digital wallet, Mobile Apps, e-commerce etc. Therefore, Banks have now bloomed into one-stop Supermarkets. Their focus is shifting from mass banking to Class banking to the introduction of value-added and customized products in order to survive the competition.

Technology enablement products like ATMS, internet banking, mobile banking (Apps), digital wallets and pre-paid cards have had favorable benefits on both banks and customers. For the customers, the important benefits are anywhere banking, ease of payment, use of secured debit and credit cards. For the banks, the major benefits are centralization of customer information, centralized transaction process, centralized accounting process, basic MIS reporting and real-time information availability.

So who is leading the charge here?

Last year ICICI bank launched many digital services which include Smart Vault which is India’s first automated locker facility with high-end robotic technology.

SBI introduced three digital banking facilities using TAB banking which enables the customer to open the saving account, apply for a housing loan and do e-KYC (Know your customer) at their doorstep.

HDFC Bank has introduced location-based mobile service for customers who will receive notification on their iWatch. ICICI Bank is also considering to add NFC tag which will introduce `tap and pay’ feature without the customer having to reach for his wallet.

NFC is a great digital initiative taken by banks. It is enabled contactless debit cards, with which the customers need to only tap their cards at the point of sales (PoS) terminals, instead of swiping them.

Mobile banking and digital wallets – front running technologies

Digital wallets and mobile banking are opening the door for telcos and software players. In an increasingly crowded and cashless financial system, traditional banks may no longer be key players.

The success of mobile payments would not have been possible without the massive growth in the number of smartphones and the falling cost of computing power, both of which are lowering the barriers to new entrants.

Researchers are sometimes tempted to ask – ‘Do we even need cash’? Here’s a video which talks about the decreasing role of cash in the global economy.

The number of mobile banking users globally is forecasted to double to 1.8 billion, over 25 percent of the world’s population, in the next four years, according to research by KPMG

Banks tying up with e-commerce platforms

Today many businesses are embracing e-commerce to expand their business and stay connected to their customers globally. With this emerging trend, banks are designing and deploying a range of new e-commerce products to interact with the customer, improve their reach and the quality of engagement.

Snapdeal and HDFC entering into a three-year partnership to launch a co-branded credit card which will drive more purchases as customers will now have a payment mechanism to use for snapdeal and will also open up customer acquisitions in smaller towns for HDFC Bank.

“Banks will have to take cognizance of e-commerce the way it is galloping,” said HR Khan, RBI deputy governor in a report in The Economic Times.

Banks will continue to invest in fin tech, with more banks having an increasing focus on ROI. A significant number of banks will also open up their APIs to the fin tech community in 2016.”– said Danny Tang, Channel Transformation Leader, Global Banking at IBM

Breaking barriers of truly social banking

Last year, Facebook announced that in America its instant-messaging app will soon allow users to send each other money just as easily as texts and photos. All they need to do is link their debit cards to their Facebook account, tap on a dollar sign in the app, type in the amount and press send. In Asia, messaging apps, such as WeChat and Line, have offered P2P transfers for some time.

Were Facebook to expand its offering internationally and make it truly instant, the impact could be huge. Facebook has 1.4 billion members, its messaging service 500m users. When this comes to India, you can expect nothing short of a revolution.

The lending business

Lending, one of the primary functions of the business, is also changing. Various players like Neogrowth are now using technology to make loan payments hassle free. For example, in Neogrowth’s business model, the repayment is automatic and flexible so that the merchant doesn’t need to pay a fixed EMI. It is based on the merchant’s average card sales.

Threats and challenges

There are many bridges to be overcome in the journey

Let’s take mobile banking for example The weak spot in any mobile-payment system is the point of enrolment when a customer’s existing credit card is linked to the system. This has to be made a fool proof system so that fraud levels do not increase in the mobile environment.

Taking due note of such challenges would ensure that 2016 is called the year of Indian banking transformation